Ultimate Vape and Tanning

Prior business known as Ultimate Tanning Inc. owned by *** Womack. we were long time tanning customers. Went in May 2019 and found out there were new owners, David Sweet and Amelia Bodden.
I inquired if our points from *** Ultimate Tanning carried over to the new business, Ultimat Vape and Tanning. Nope, so sorry but the records didn't carry over. We were obviously disappointed that *** sold the store, inventory but kept customers paid in advance tanning sessions.
Amy Bodden offered us a 10% discount and we decided to purchase a similar plan to what we had used for years. We did not use as it was summertime and winter 2020 Covid hit and canceled our Arizona trip that we would have tanned for prior to leaving in April. No big deal, points and plans don't expire.
Friday July 24, 2020 we drove by the store and saw a for sale sign. Note on the door said closed due to Covid issues. While I understand lots of small businesses struggled and some went out of business, they should not be allowed to keep unused customer deposits on tanning plans, the bulk of their business model. Isn't this the definition of kiting? I believe they legitimately were hurt by covid. As were travelers and tanners who couldn't travel. I think they are long time Windsor entrepreneurs and own other busninesses. Are they allowed to use prepaid tanning packages to pay bills until all their revenue is exhausted?